Macquarie Bank Ltd v Juno Holdings S.a.r.l [2015] NSWSC 919 (8 July 2015)

Last Updated: 13 July 2015

Supreme Court New South Wales

Case Name:	Macquarie Bank Ltd v Juno Holdings S.a.r.l
Medium Neutral Citation:	[2015] NSWSC 919
Hearing Date(s):	8 July 2015
Decision Date:	8 July 2015
Jurisdiction:	Equity Division - Commercial List
Before:	Stevenson J
Decision:	Stay refused
Catchwords:	PRACTICE AND PROCEDURE – stay of proceedings – application to enforce judgment obtained in Netherlands Antilles – whether proceedings should be stayed pending execution by bailiff of the District Court of Amsterdam against shares of defendant’s subsidiary
Legislation Cited:	Foreign Judgments Act 1991 (Cth) Foreign Judgments Regulations 1992 (Cth)
Cases Cited:	Bella Products Pty Ltd v Creative Designs International Ltd [2009] FCA 868; 258 ALR 538 Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 193 Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd [1978] FCA 49; (1978) 35 FLR 346 In the matter of Treadtel International Pty Ltd [2014] NSWSC 1406 L Grollo Darwin Management Pty Ltd v Victor Plaster Products Pty Ltd [1978] FCA 17; (1978) 33 FLR 170 Muller v Fencott [1981] FCA 129; (1981) 53 FLR 184 Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd [1992] FCA 72; (1992) 34 FCR 287
Texts Cited:	M Davies, A Bell and P Brereton, Nygh's Conflict of Laws in Australia, (9th ed 2014, LexisNexis Butterworths)
Category:	Procedural and other rulings
Parties:	Macquarie Bank Limited (Plaintiff/Respondent) Juno Holdings S.a.r.l (Defendant/Applicant)
Representation:	Counsel: I M Jackman SC with J A Hogan-Doran (Plaintiff/Respondent) P M Wood with D R Sulan (Defendant/Applicant) Solicitors: Quinn Emanuel Urquhart & Sullivan (Plaintiff/Respondent) Arnold Bloch Leibler (Defendant/Applicant)
File Number(s):	SC 2015/162523

EX TEMPORE JUDGMENT (REVISED)

1. The matters before me are the defendant's applications, by notice of motion filed on 19 June 2015, to set aside a freezing order made by Hammerschlag J on 1 June 2015 (on the basis of material non-disclosure) and to stay the proceedings until 11 September 2015 (for reasons that I will set out below).
2. The first issue has been resolved between the parties on the basis of an undertaking given to the Court by the defendant in exchange for a continuation by the plaintiff of an undertaking as to damages that it gave the Court on 1 June 2015. Earlier today, on the basis of these undertakings, and by consent, I dissolved the freezing order.
3. What remains for determination is the defendant's application for a stay of the proceedings until 11 September 2015.
4. In these proceedings, the plaintiff ("Macquarie") seeks to enforce a judgment obtained by it against Juno Holdings BV (or “NV”) ("Juno") in the Court of First Instance of the Netherlands Antilles in Curacao on 19 April 2010 in the sum of AUD15,625,000 plus interest. With interest, Macquarie now claims an amount in the order of AUD25 million.
5. Macquarie alleges that the defendant, Juno Holdings S.a.r.l, a company incorporated in the Grand Duchy of Luxembourg, is (to adopt the language used by Mr Jackman SC, who appeared with Mr Hogan-Doran for Macquarie) a "continuation of the legal personality" of Juno or is otherwise "bound by the res judicata effect” of the judgment of 19 April 2010.
6. The defendant, on the other hand, contends that Juno was "discontinued" on 6 December 2012, and that the defendant was incorporated the following day in Luxembourg. The defendant contends there is no “identity of parties” between it and Juno, and that Macquarie's claim to enforce the judgment of 19 April 2010 is bound to fail for that reason: see M Davies, A Bell and P Brereton, Nygh's Conflict of Laws in Australia, (9th ed 2014, LexisNexis Butterworths) at [40.37].
7. These are matters for the final hearing and I express no view about them.
8. Macquarie's application in the proceedings is to enforce the judgment of 19 April 2010 at common law. The Foreign Judgments Act 1991 (Cth) does not apply because, I am told, the Kingdom of the Netherlands (of which the Netherlands Antilles forms part) is not listed in the Foreign Judgment Regulations 1992 (Cth).
9. Macquarie obtained the judgment of 19 April 2010 on the basis of a “Note” issued by Juno in favour of Macquarie on 29 April 2004. Under the relevant transaction documents, the parties submitted to the jurisdiction of the courts of the Netherlands Antilles.
10. Juno actively appeared in the Netherlands Antilles proceedings (including filing a cross-claim) but was unsuccessful in resisting Macquarie's claim. As I have said, judgment was entered against it by the Court of First Instance in Curacao on 19 April 2010. Juno appealed to the Joint Court of Justice of Aruba, Curacao, Saint Martin and of Bonaire, Saint Eustance and Saba (which dismissed the appeal on 21 February 2012) and then to the Supreme Court of the Netherlands (which dismissed the appeal on 13 September 2013).
11. In the meantime, on 18 May 2010, Macquarie instructed the Bailiff of the District Court of Amsterdam to obtain an "executory attachment" of shares in a wholly owned subsidiary of Juno, Jupiter Holdings BV (or “NV”) ("Jupiter").
12. On 11 September 2014, following the dismissal by the Supreme Court of the Netherlands of the final appeal on 13 September 2013, the District Court of Amsterdam appointed the Bailiff at Amsterdam "as the Bailiff charged with sale under execution" of the Jupiter shares. The District Court ordered that the Bailiff sell the shares within one year of the order; that is, by 11 September 2015.
13. The current position is that on 22 June 2015 the Bailiff told the defendant's lawyer in Amsterdam that he had "picked up the file again and wants to proceed with the aim of completing the process in the coming months if possible". The Bailiff further stated that he "intended to make an inventory of potential buyers and proceed from there".
14. My attention was not directed to any other evidence casting light on what steps the Bailiff has actually taken to sell the shares.
15. However, as I have said, he must, in accordance with the terms of the 11 September 2014 order of the District Court of Amsterdam, sell the shares by 11 September 2015.
16. In that context, the defendant seeks a stay of these proceedings until that date.
17. I proceed upon the basis that, notwithstanding the dispute between the parties as to the identity of Juno and the defendant, it is common ground the Bailiff has power to sell the Jupiter shares and account to Macquarie for any proceeds in satisfaction or partial satisfaction of its judgment against Juno.
18. It is common ground that the relevant principles are as stated by Lockhart J in Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd [1992] FCA 72; (1992) 34 FCR 287 and summarised by Brereton J in In the matter of Treadtel International Pty Ltd [2014] NSWSC 1406 at [12]:

“Thus, on an application for a temporary stay, the question is not whether the proceedings are vexatious and oppressive. The power of the Court to grant a temporary stay of this kind is an aspect of its general power to control its own proceedings. It is exercisable where proceedings are pending in another court and it is desirable that those proceedings should proceed to their conclusion first. Its exercise is informed by the general principle that it is undesirable that two courts should determine the same dispute, and practical considerations based on commonsense and fairness guide which action should proceed first [L Grollo Darwin Management Pty Ltd v Victor Plaster Products Pty Ltd [1978] FCA 17; (1978) 33 FLR 170, 177; Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd [1978] FCA 49; (1978) 35 FLR 346; Muller v Fencott [1981] FCA 129; (1981) 53 FLR 184, 189; Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 193; Sterling Pharmaceuticals, 291; Bella Products Pty Ltd v Creative Designs International Ltd [2009] FCA 868; (2009) 258 ALR 538, 543 [22]-[24]. A non-exhaustive list of relevant considerations was provided by Lockhart J in Sterling Pharmaceuticals, as follows (at 291):
● Which proceeding was commenced first;
● Whether the termination of one proceeding is likely to have a material effect on the other;
● The public interest;
● The undesirability of two courts competing to see which of them determines common facts first;
● Consideration of circumstances relating to witnesses;
● Whether work done on pleadings, particulars, discovery, interrogatories and preparation might be wasted;
● The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues;
● How far advanced the proceedings are in each court;
● The law should strive against permitting multiplicity of proceedings in relation to similar issues;
● Generally balancing the advantages and disadvantages to each party.”

19. There is no evidence before me as to the value of the Jupiter shares. However, Jupiter is a wholly owned subsidiary of Juno (or the defendant, if there is a difference). There is no evidence before me as to the likely appetite in the market in the Netherlands, or beyond, for such shares. I am told that Jupiter is not a publicly listed company.
20. Jupiter's accounts for the financial year ending 30 June 2015 show that its net equity is in the order of USD750 million, with its major asset (in the order of USD660 million) being "loans due from group companies". Juno's accounts for the same period show its major fixed asset (in the order of USD28 million) to be "investments in subsidiaries". The only subsidiary of Juno revealed by the evidence is Jupiter. Even if Jupiter is Juno's only subsidiary, the value attributed by Juno in its books to its "investment" in Jupiter suggests that Jupiter's attributed value to its own assets is highly optimistic.
21. In those circumstances, Mr Wood, who appeared with Mr Sulan for the defendant, accepted that there was no "compelling" evidence to suggest that the Bailiff was likely to realise from the proceeds of sale of Jupiter's shares sufficient to pay down Macquarie's judgment debt. I would go further and say that, on the evidence before me, there is no more than a "speculative possibility" (Mr Jackman's words) of this occurring. And that assumes that the Bailiff is able to find a buyer for the Jupiter shares.
22. Therefore, I do not think it is “likely" that the termination of the proceedings in the Netherlands (assuming that is the stage reached by the Bailiff on 11 September 2015) will have any material effect on these proceedings.
23. It is true that if a stay is not granted, but the Bailiff ultimately realises from the sale of the Jupiter shares sufficient to pay down Macquarie's judgment debt, the defendant will unnecessarily incur the costs of these proceedings in the meantime.
24. However, in that regard, Macquarie has given to the Court the undertaking set out in MFI 3. In substance, the undertaking is to pay the defendant's costs thrown away if it transpires that the Bailiff can sell the Jupiter shares by 11 September 2015 and that the proceeds of that sale are sufficient to meet Macquarie's judgment debt.
25. Some of the other factors referred to in the passage I have set out at [18] do point, albeit only faintly in my view, in favour of granting a stay.
26. For example, it is true that the Netherlands Antilles proceedings commenced many years before these proceedings (which have only been on foot for a little over a month) and are at a very much more advanced stage (indeed near their conclusion) than these proceedings. And, absent a stay, it is true that two courts will be directing their attention, albeit in very different ways, to the resolution of aspects of the same dispute.
27. However, it seems to me that the prospect of the outcome of proceedings in Amsterdam rendering these proceedings otiose is so remote as to compel dismissal of the defendant's application.
28. I make the following orders:
    • (1) Subject to the matters set out at [2], the defendant’s notice of motion of 19 June 2015 is dismissed.
    • (2) The costs of the defendant’s notice of motion of 19 June 2015 be the plaintiff’s costs in the cause.
    • (3) Direct that by 13 July 2015 the plaintiff serve any proposed amended commercial list statement and any further evidence in chief.
    • (4) Stand the matter over for directions before the Commercial List Judge on 17 July 2015.

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